Is crypto dead in 2022? Myths and Facts

There is no doubt that the cryptocurrency market has seen better days. But the question always remains unanswred “is crypto really dead?” .With prices still reeling from last year’s correction and many tokens continuing to bleed value, the market is currently not in the best of places. That being said, it would be overly pessimistic to assume that this current state is indicative of things to come. To make matters even more interesting, there have been several instances in which industry insiders have made bold proclamations about the future of blockchain and its digital token counterparts—many of which are concerning for those who hold investments in these assets. In a recent interview with CNBC Fast Money, venture capitalist and fund manager Chris lescaree publicly stated that he believes there will be no exchanges trading crypto by 2021 or 2022 at the latest. While this may sound like an outlandish claim, his reasoning behind this theory is rather convincing and backed by data from interviews with over 100 venture capitalists.

Why is everyone calling crypto dead?

A good way to start this article off would be to get an overview of why so many people have been calling crypto dead.

1. The first factor that has contributed to this perception is the fact that many ICOs have been fraudulent. This has caused a lot of investors to lose money and created a poor reputation for the crypto sector as a whole.
2. The second factor that has led to this perception is that bitcoin’s utility as a payment method is questionable. While it is true that the number of daily transactions has increased significantly throughout the past year, the actual utility that these transactions provide is relatively low.
3. Finally, the market has experienced extreme volatility and has been extremely bearish for a significant period of time—leading many to believe that we are in the midst of a long-term bear market.

Institutional investors are staying away

The institutionalization of digital assets has long been seen as the key to unlocking their full potential and bringing them into the mainstream.

While there have been certain developments in this regard, it would seem that the process of bringing institutional money into the space has been a lot slower than most people expected.

As such, the lack of liquidity and strong regulatory framework that prevents institutional investors from entering the crypto market has led to many individuals calling it a bubble. If the institutional money does not flow in, then the bubble will burst. However, there are some significant challenges currently preventing this from happening.

One of these challenges is the lack of a proper custody solution. While there are companies working on solutions to this problem, many investors have expressed a desire to see these solutions implemented as soon as possible.

Another challenge is the apparent lack of regulation. While most experts agree that regulation is a good thing and will be beneficial for the space, in the long run, there is no telling how long it will take for it to be implemented and enforced. If these issues are not resolved quickly, it is likely that institutional investors will not be a part of the cryptocurrency market in the near future—if ever.

The infrastructure is too poor

Another thing that has led many to believe that the cryptocurrency industry is on its deathbed is the fact that the infrastructure is just not there yet. While the blockchain technology on which many of these tokens are built is revolutionary, the current state of the market’s infrastructure makes it difficult for this technology to truly shine. The fact that there are only a handful of exchanges capable of handling cryptocurrencies of this scale makes it difficult for new investors to enter the market. And with each passing day, the demand for tokens is on the rise. This has caused significant bottlenecks in the market, leading to long waitlists and empty order books. If things do not improve in this regard, then people may decide to take their business to another industry. One way to solve this problem would be to create a decentralized exchange. A decentralized exchange would make it easier for people in every part of the world to have access to tokens. Additionally, centralized exchanges are controlled by a single entity, which means that they can be shut down or hacked at any time. A decentralized exchange would make it virtually impossible to shut down the market.

Bitcoin has lost its brand value

Another thing that has led many to believe that crypto is on its deathbed is the fact that many of the top tokens are no longer seen as the “golden standard” that they were in the past. Many of these assets have lost a significant portion of their brand value as a result of the bear market. However, most industry experts agree that this is likely a temporary trend that will be reversed as soon as the crypto sector begins to rise again. One way to reverse this trend would be to focus on building strong partnerships with reputable companies. A good example of this would be the partnership between Ripple and MoneyGram. The partnership between these two giants of the industry has shown that blockchain technology can be used to improve the efficiency of payment systems around the world. Another way to maintain or regain brand value would be to focus on introducing new features. Many tokens have been criticized for having no real use cases or value in the real world. If these tokens are able to introduce new features or services, then it is likely that their brand value will rise again.

Summing it up

There are many reasons why people have called crypto dead. However, it’s important to remember that this is not the end for the industry. While it is true that the market is currently in a downtrend, there are many signs that indicate that the market is on its way up again. As such, it would be wise not to get too caught up in the current sentiment of the market and to keep a close eye on the developments of the industry going forward.

Note: This is not financial advice. This how-to article is for educational purposes only. Please note that cryptocurrency is a highly volatile asset class; only invest what you can afford to lose.